Tory budget fails to deliver on election promise



    No change in capital gains policy

    OTTAWA, Feb. 26 /CNW Telbec/ - The Canadian Real Estate Association is
disappointed that a plan to introduce deferral of capital gains taxes and the
recapture of capital cost allowance were not included in today's federal
budget.
    "REALTORS(R) welcome investments in infrastructure and transit that have
been made by Minister Flaherty in this budget, and in previous ones," says
CREA CEO Pierre Beauchamp. "The fact remains that there are still punitive tax
consequences for small investors when they sell and reinvest in a new
property."
    Capital gains tax adjustment remains the last unfulfilled major
Conservative Party campaign promise from the last election. "We believe the
Conservative government remains committed to fulfilling its promise to permit
capital gains tax deferrals, and REALTORS(R) will continue to work with the
government, and with members of all parties, to ensure this becomes a reality"
Mr. Beauchamp adds.
    "We know that Minister Flaherty is concerned about tax fairness, and is
committed to making sure that all forms of investment are treated fairly under
the Income Tax Act. REALTORS(R) know that real property investments continue
to be at a disadvantage in Canada's tax code and believe that small investors
should be allowed to sell and reinvest in the same way that they can with
their stocks and bonds inside an RRSP."
    It is CREA's view that tax deferral on reinvestment in rental property
would promote the supply and affordability of rental housing, promote
environmentally-friendly urban regeneration, and lead to greater equity
compared to the income tax treatment of shares, businesses and owner-occupied
properties.
    "Canada's rental housing markets continue to face a problem that some
other countries have addressed. Properties are 'locked-in' because small
investors essentially lose their growth in capital if they choose to sell and
reinvest," Mr. Beauchamp explains. "However, they still aren't selling because
they can't afford to pay the capital gains taxes."
    CREA's research and policy analysis for the capital gains rollover
proposal shows the tax deferral on reinvestment in rental property will
promote the supply and affordability of rental housing, promote
environmentally-friendly urban regeneration, and result in greater equity
compared to the income tax treatment of shares, businesses and owner-occupied
properties. The policy change would also benefit mostly Canadians of moderate
income.
    CREA's capital gains rollover policy proposal is posted on the
Association's web site www.crea.ca, under news releases.

    The Canadian Real Estate Association represents more than 94,000
REALTORS(R) across Canada in more than one hundred real estate Boards and
Associations.




For further information:

For further information: Bob Linney, CREA Communications Director, (613)
237-7111, rlinney@crea.ca; James Brennan, CREA External Relations Director,
(613) 237-7111, jbrennan@crea.ca

Organization Profile

The Canadian Real Estate Association

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FEDERAL BUDGET REACTION 2008

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